The Attention NetworkDecentralized Autonomous Advertising Network

February 3, 2018

Contents

1 Executive Summary 3

2 Mission Statement and Objectives 42.1 Core Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3 Technical Innovations 63.1 Provably Fair Auction System . . . . . . . . . . . . . . . . . . . . . . 6

3.1.1 Transparency of Auction System . . . . . . . . . . . . . . . . 73.2 Staking and Democracy for Ad Policy and Anti-fraud . . . . . . . . . 8

3.2.1 Use of Policy Subnetworks . . . . . . . . . . . . . . . . . . . . 93.2.2 Voting System . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3.3 IPFS Edges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4 Token Information 114.1 Technical Justification . . . . . . . . . . . . . . . . . . . . . . . . . . 114.2 Sale Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.3 Milestone Accountability Voting . . . . . . . . . . . . . . . . . . . . . 13

5 Market Analysis 145.1 Blockchain Competition . . . . . . . . . . . . . . . . . . . . . . . . . 145.2 Traditional Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

6 Operations and Roadmap 156.1 Platform Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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6.2 Software Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176.3 Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . 176.4 Future Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

6.4.1 Pay for Lead Quality . . . . . . . . . . . . . . . . . . . . . . . 186.4.2 Surrounding Ecosystem . . . . . . . . . . . . . . . . . . . . . . 19

7 Team 207.1 Giuseppe A. Burtini, Chief Executive Officer . . . . . . . . . . . . . . 207.2 Jake G. Davies, Chief Technology Officer . . . . . . . . . . . . . . . . 207.3 Eric Huang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207.4 Niket Shah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207.5 B. Johannes Edinger . . . . . . . . . . . . . . . . . . . . . . . . . . . 217.6 Dr. Scott Fazackerley . . . . . . . . . . . . . . . . . . . . . . . . . . . 217.7 Yuchen Li . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

8 Legal Considerations 22

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1 Executive Summary

Attention Network is a decentralized platform that provides a next generation ad ex-change and Internet marketing platform based on blockchain technology. With the riseof blockchains and the Ethereum platform, the world has the tools to produce reliable,cryptographically secured, decentralized applications (DApps).

Our goal is to revolutionize the online advertising marketplace. We will produceincreased accessibility for smaller advertisers and increase returns for all parties. Wewill improve efficiency and trust in online advertising, applying well-understood algo-rithms and trustless network principles. More specifically, through a combination oftechnological innovations spearheaded by the power of blockchain and our considerableonline advertising experience, we propose a novel network, improving the experience foradvertisers and publishers alike.

Online advertising is the biggest advertising market at approximately 250 billion USdollars per year. A considerable portion of that ad spend is captured by monolithicexchanges with consumer-, advertiser- and publisher-hostile walled gardens. Indeed,estimates show that over half of that spend is drag. Fees and margins are high, distrustand fraud is rampant and the measurement technology is limited and disjointed. Thisdrag leaves advertisers and publishers alike unsatisfied and eager for improvement.

Beyond cost, we believe that ad policy in the status quo, while aiming to protectbrand equity, hinders both advertiser and publisher. In that regard, we propose a newstaking-based policy system which improves both efficiency and protection for brandequity without the censorship or drag on either party. The existing system inherentlypromotes closed, centralized systems with high profit margins and sizable barriers toentry. The system we have designed, Attention Network, replaces this with an economi-cally and game theoretically viable, blockchain-based, democratic, transparent solution.

Adoption is a core challenge in establishing a new network. To motivate adoption,Attention Network has a plan to integrate and consume the existing advertising ecosys-tem for the benefit of our users. This allows us to hit the ground running from day one,provides an integrated user experience1 to gain real user adoption immediately. We’vegone a step further. We have already secured partnerships with high-volume publishersand advertisers. This will allow us to seed the network, with real orders and meaningfulvolume, immediately upon launch.

The rest of this document discusses the mission of the company. A business modeland plan is presented, and, the details of some of the technical innovations we haveplanned. These innovations, combined with our hard-earned expertise and extensiveplanning and research, allow Attention Network to achieve scalable, economically effi-cient and most importantly, decentralized solutions to the major problems that plaguethe advertising industry today.

1In the current environment, many of ad exchanges exist that are inaccessible to regular advertisers,due to high fixed costs, the requirement of custom software teams to define “programmatic” integrationsand the like. The unified experience we propose within is a clear path towards the economic incentiveto adopt Attention Network.

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2 Mission Statement and Objectives

Our mission is to revolutionize online advertising, resolving major day-to-day headachesdealt with by advertisers and publishers alike, by utilizing blockchain technology.The core issues we are addressing include trust, fraud, privacy, cost-effectiveness andsignificant barriers to entry.

Our core philosophy is to produce an environment of trustless (and therefore,trustworthy2), fair and low-cost advertising. Unlike other systems, our product willbe fully open source, completely verifiable and fully democratic. Users will havecontrol over policy, both in how the network behaves and in how their advertisements,publications and media outlets and personality profiles are handled.

2.1 Core Objectives

Attention Network aims to do the following.

• Provide a credible, decentralized alternative to walled garden advertising net-works.

• Interact with the existing ecosystem in a way that makes adoption easy andimmediately beneficial to all parties.

• Remain trustless and decentralized – providing excellent tooling for our coreproduct while cultivating an ecosystem of supporting tools and services.

• Provide provable, mathematical guarantees utilizing blockchain technology toaddress all possible user uncertainty around bids, mechanisms, auction designand policy.

• Produce a democratic environment, where ad policy is controlled by publishersand advertisers in mutual agreement and enforced with a decentralized stakingmodel, protecting brand equity in a novel and powerful way, while producinga flexible network for diverse use cases.

• Implement a low-latency, consumer-friendly prediction network and auctionsystem for maximizing advertiser and publisher outcomes, including innovationon challenges of measurement, lifetime value and return on ad spend.

2Requiring no trust allows anyone to validate any claims made; this model, combined witheconomic and game theoretic forces inherent in our design, ensures honesty and transparency amongall participants.

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To summarize, Attention Network wishes to build a network that is simple, re-liable and efficient, improving the state of online advertising for all parties, whileintegrating ideals like decentralization, provable fairness and consumer-friendly be-havior to advance the technological and social state of marketing.

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3 Technical Innovations

3.1 Provably Fair Auction System

In auction theory and mechanism design theory, a Vickrey–Clarke–Groves (VCG)auction is a type of sealed-bid auction of multiple advertisement slots with manydesirable properties. Buyers submit bids that report their individual valuations forthe items, without knowing the bids of the other people in the auction [7]. Theauction system assigns the items according to Equation 1, which can be shown toproduce a socially optimal allocation and give bidders an incentive to reveal theirhonest valuations, by ensuring that the optimal strategy for each bidder is to bidtheir true valuations of the items.

f(v) = arg maxa∈A

∑j

vj(a) s.t. pi = maxa

∑j 6=i

vj(a) (1)

That is, it picks the alternative allocation a that maximizes the social outcomeof the auction3. This mechanism is efficient and truthful4, as it simultaneously pro-duces a Nash equilibrium of honesty among all participants and maximally efficientallocation of placements. To see why, follow this proof:

Proof.

Optimality of honesty in Vickrey–Clarke–Groves. Let M = {m1, · · · ,mn}denote publisher inventory, A = {a1, · · · , an} bidders (advertisers) and ui(v) denotenet utility for a given valuation from the auction for bidder i and pi(v) denote thepayment from bidder i. Let vi denote bidder i’s true valuation of slot mi. Let f(v)be the decision rule defined in Eq. (1) for a vector of valuations v.

An individual’s utility function can be derived as:

ui(v) = vi(f(v))− pi(v) (2)

We see the winner’s utility is made up of two parts, vi(f(v)), which representsthe socially optimal distribution and pi(v), the price offered to player i. The rule

3We invite the reader to a more comprehensive exploration of Vickrey–Clarke–Groves in [2]including concepts like the implementation of a Clarke pivot rule and proofs of individual rationalityand incentive compatibility.

4Truthfulness is often called dominant-strategy-incentive-compatible (DSIC) in the incentivecompatibility or mechanism design literature.

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used to select prices, as given in Eq. (1), expands this utility such that the winner’sprice is set equal to the externality caused by player i.

ui(v) = maxa

∑j

vj(a)−maxa

∑j 6=i

vj(a) (3)

Here, you will see the bidder pays maxa

∑j 6=i vj(a), which is the cumulative social

loss incurred by the other bidders. Thus, the bidder pays exactly the cumulativecost to other bidders, and receives his cost plus excess valuation (his overbid), hencethe mechanism is socially optimal under truthful bidding. As this utility reflects themaximum achievable under all alternatives, honest bidding vi is optimal.

While other ad networks use similar (though, as far as we can find, only Face-book claims to utilize an auction with provable efficiency) mechanism designs, nonetwork provides a mechanism which is verifiable. Indeed, many advertisers haveexpressed reservations about the honesty of these real world auction systems, withmany believing factors such as short-term stock market performance partially drivethings like auction penalties and behavior. Further, other exchanges include signif-icant deviations to the core auction mechanism without proof that the properties,such as fairness and honesty, asserted by the mechanism are actually retained. Ourblockchain-based solution, an application of VCG with input records permanentlystored on the blockchain, allows proof of fairness and proof of mechanism.

As the proofs are traditionally academic, expressed in a contrived environmentthat may not reflect the necessities of the real world, we intend to modify the mecha-nism to include functionality like contextual optimization, targeting variables and adspend pacing infrastructure. We’ve secured advisory and professional relationshipswith a network of analysts, professional economists and researchers in the area ofauction theory to ensure that any modifications we make to the traditional VCGmodel will retain their fairness, honesty and verifiability.

3.1.1 Transparency of Auction System

By writing keccak256 hashes to the blockchain, we can ensure that all bids, chargesand advertisements in Attention Network can be validated by any third party. Ourproof of mechanism design allows all parties to the auction validate the decisionswere made according to the terms agreed. This, combined with the staking modeldiscussed in Section 3.2, allows advertisers to know they received precisely what theypaid for, publishers to know they were paid for precisely what they delivered and

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both parties to have comfort in exposing their brands and media properties to theinherent risks of advertising.

Furthermore, this transparency – utilizing appropriate hash- and bucket-basedanonymization techniques to enforce personal privacy considerations – allows a novelnetwork of data partners and researchers to make use of the entire network’s data.This provides a research benefit to both social scientists and entrepreneurs alike, of-fering large scale study of performance data across the network, in a safe, anonymizedway.

We expect, with appropriate cultivation of business relationships, that this trans-parency will produce a network of data analysts and ad tech. companies who provideactionable insight, increased return on ad spend (ROAS), dynamic creative toolingand other machine learning and artificial intelligence-derived functionality for allparties to better understand their businesses and ecosystem.

3.2 Staking and Democracy for Ad Policy and Anti-fraud

In order to support a strong ecosystem of legitimate, high-impact advertisers, strongad policy enforcement is essential. In the status quo exchanges, ad policy is generallydictated by a central team, who employ staff to manage enforcement and to vary thepolicy as societal and brand standards evolve. This produces an environment wherelegitimate, but contextually sensitive businesses, who would otherwise be willing towork together, are excluded and all parties perform sub-optimally.

We propose a new system – one which prevents fraud and cheating while meaning-fully increasing the flexibility of the policy environment. Advertisers and publishersalike will put valuable consideration up as assurance that they are compliant withopt-in, democratically determined rules. Publishers will require that advertisers haveprovided a minimum level of stake associated with the appropriate rules they requirefor protection of their media platform’s brand, while advertisers will similarly requirethat publishers have provided a given level of stake for their protection.

Upon dispute, a crowd-sourced voting system, incentivized with a fraction of theavailable stake, allows resolution of soft, human-defined rules. As an example, on thepublisher-defined rules side, rules may be as strict as “all ads must have a particularcolor and font” and “ads must not contain particular imagery” or as loosely definedas “ads must be appropriate for a 8–12 year old audience” and “advertisements mustbe truthful and accurately reflect the product for sale.” We expect the advertiserand publishing communities to develop a numerous sets of mutually agreeable rulesto satisfy many different cultures, businesses and use cases.

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3.2.1 Use of Policy Subnetworks

Policy subnetworks allow advertisers and publishers to define their needs for pro-tecting brand equity clearly while allowing flexibility and preventing censorship. Inexisting ad exchanges, policy is generally homogeneous – all advertisers and publish-ers are expected to comply with the same rules. In Attention Network, we presentsubnetworks, with distinct rules and enforcement policies, allowing mutually incom-patible advertiser-publisher pairings to arise on the same network. For example,some forms of contentious subject matter advertising, such as politics, cryptocur-rency and adult media, can exist alongside publishers which cannot afford to haveany such content on their property by utilizing clear, restrictive subnetworks.

Presence of an advertisement or publisher in a subnetwork is not mutually exclu-sive and rules are enforced strictly by a democratic smart contract. This allowinga large number of simultaneous networks to emerge, while giving advertisers andpublishers the opportunity to plainly agree on the type of content associated withtheir brands.

To promote initial adoption, these subnetworks will be seeded by the AttentionNetwork team, including a broad default commercial network, an adult content net-work and a collection of simple sensitive content networks (child-friendly, political,cryptocurrency, mental health, and others), however, any member of the commu-nity can create new subnetworks and we intend to cultivate a full-featured emergentenvironment.

3.2.2 Voting System

To enforce the soft, human-defined rules of the subnetwork, we will crowd-sourceevaluation services from the community. By providing a small stake to preventabuse and properly align incentives, an advertiser or publisher can report an argu-ment, asserting that an advertisement or media property is non-compliant with thesubnetwork it is running in. This will then be sent to the community for a closedvote5. When the vote completes, the aggregate result will be revealed and the stakewill be distributed to the impacted members and voters accordingly6.

5We have established a game theoretically sound closed voting system to prevent manipulation –using salted, secured hashes, the community can record, and later verify, their vote without causingbandwagon effects. Carefully implemented, this provides a trusted mechanism for dispute resolutionvia a jury of one’s peers.

6As an example, if an advertiser reports a publisher for being non-compliant, and the communitydetermines the publisher is compliant, the advertiser’s stake will be distributed. If the communitydetermines the publisher is non-compliant, then the publishers stake will be distributed.

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3.3 IPFS Edges

The necessary creative data for an advertisement is kept on a peer-to-peer crypto-graphically secured storage platform called the Interplanetary File System (IPFS).IPFS is an open source product that has been under construction since 2014 [5].

We have completed extensive experimentation to identify bottlenecks and ensureIPFS will produce an appropriate time-to-first-byte latency for the ad server. Ourresearch shows the IPFS network is effective and is capable of meeting our throughputrequirements. We’ve further shown in our research, that for minimal cost, we canblend the peer-to-peer nature with a high-throughput, guaranteed delivery platformby hosting our own IPFS service, with immediate deployment of creative assets tohigh-throughput “edge nodes.”

IPFS is a fully immutable platform. This provide benefits like indefinite cachingon edge nodes, reliable lookups and cryptographic guarantees. Providing a secure,stable, caching delivery network on top of IPFS improves the performance for ourusers. It ensures that our ad server is reliable, always available, and always at lowlatency, while retaining all the desirable properties of decentralization – i.e., if ourdelivery network were to disappear or to act maliciously, the network would stillbehave properly.

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4 Token Information

In this section we present the new token, ATTN, which we will soon release tothe public. ATTN is implemented according to the ERC20 token standard. Thisstandard ensures compatibility with the extensive infrastructure already available.A fixed pool of tokens will be generated according to the caps defined in the nextsection.

Tokens will only be created as part of the initial sale phase. No furthertokens will ever be generated. The community will hold 85% of all ATTN andthe Attention Network team will retain 15% subject to a lock-in period.

In the rest of this section, we explain the technical motivation for creating a newERC20 token, then we introduce the sale and the parameters we’ve selected to ensurea successful ecosystem and finally we explain the system of milestone accountabilityvoting that we have designed to help demonstrate the Attention Network team’scommitment to the product.

4.1 Technical Justification

The ATTN token serves a number of core purposes on the Attention Network plat-form:

• ATTN will be the only means for paying for advertisements on the platform.

• Publishers will be compensated for their traffic in ATTN7.

• Advertisers and publishers stake ATTN in our policy assurance program.

• ATTN holders will be permitted to engage in milestone completion votes.

• ATTN holders will be permitted to engage in the community vote for the policyassurance program, where they will receive part of the staked value in ATTN.

Our use of an ERC20 token has considerable technical advantages. We believe itis currently the only viable way to produce such a network in a decentralized manner.To be effective, Attention Network has high-throughput and extremely low-latencyrequirements. Without a token, certain queries, like the queries necessary to searchadvertisements in real time require a complete scan of the blockchain, a task that is

7To attract traditional publishers, we may partner with or construct a lightweight exchangeplatform to facilitate immediate exchange to and from fiat and other popular currency within theplatform.

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impossible to achieve within our latency requirements. Our product can satisfy manycomplex queries with low latency by making efficient use of custom data structuresand the event logging platform provided by the Ethereum Virtual Machine (EVM).

Additionally, our staking system, as described in 3.2, requires care to ensure thegame theoretic and business properties hold. The token has been constructed withcareful attention to the properties necessary to safely implement the core stakingfunctionality and secure the system. By only allowing those to hold ATTN token tostake in the system, the integrity of the staking platform and thus the entire networkis guaranteed.

4.2 Sale Details

The sale is expected to start on February 15, 2018 at 2pm (PST). There are three keystopping criteria for the token sale: a soft cap, which triggers a 1 week countdownto the end of the sale; a hard cap, which triggers an immediate stop of the sale; anda 60 day expiry upon which the sale will end if the caps have not been hit.

A soft cap of 26 000 ETH will be used. The block at which we have sold morethan the soft cap will mark the beginning of a timer for 7 days (168 hours), afterwhich, the sale will end, whether the hard cap is reached or not. If at any time thehard cap of 450M ATTN tokens sold is reached (for a total of 39 000 ETH), the salewill end immediately and no further tokens will be issued. Upon completion of thesale, any unallocated tokens will be destroyed (i.e., “burned”).

The price will be tiered in the “early bird discount” fashion. For the first 11,000ETH, tokens will be issued at a price of 1 ETH for 12 000 ATTN. The next 13 000ETH worth of ATTN will be sold at 1 ETH for 10 000 ATTN. All remaining ATTNwill be sold at 1 ETH = 8 000 ATTN.

The Attention Network team will retain 15% of the issued tokens for adminis-trative purposes and to further signal our commitment to the product. Two thirdsof these retained tokens will be frozen for 12 months. The remaining one third willbe allocated to a bounty program and our advisory board as compensation for theirservices.

The Attention Network management has determined an amount necessary tocomplete and market the core product. If this minimum goal is not reached by theend of the sale duration, then all contributed Ether will be refunded. Any tokens pur-chased as part of the token sale will be allocated immediately, to the buyers account,however, no transfers will be allowed until the minimum goal has been reached. Im-mediately after this minimum goal is reached, you will be able to use the tokens inthe Attention Network application available at demo.attentionnetwork.io.

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Figure 1: Token Allocation Figure 2: Projected Use of Funds

4.3 Milestone Accountability Voting

Following in the footsteps of some of the most successful blockchain products andthe public recommendation of the founder of Ethereum, Vitalik Buterin [1], we wantto signal our accountability and commitment to the product by locking up a fractionof the total proceeds of the token sale, subject to community release.

Members of the ATTN community will be given a vote in determining if coremilestones have been met and the outcome of this vote will determine when theAttention Network team will get access to the token sale proceeds. The AttentionNetwork team will hold an open vote for each milestone, and token holding commu-nity members will be given the opportunity to determine whether a task is completedor not.

If the vote is negative, our community engagement process will identify and ad-dress the areas for improvement and the vote will be rescheduled. In order to protectthe platform from vote manipulation, the lock will be released one month after threefailed votes. This milestone accountability model protects the functionality of theproduct, protects the community and does not risk the permanent destruction ofvalue to voter manipulation or contention.

We will freeze 25% and 10% of the total token sale proceeds upon completion ofthe sale, until the successful completion of each of the two remaining milestones notedin our Figure 6.1 in the Platform Roadmap section below. Like other projectsfollowing this model, the specific amounts locked may be changed to sat-isfy the needs of the Attention Network team. This process will beginimmediately after the sale has been completed.

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5 Market Analysis

5.1 Blockchain Competition

We’ve done an exhaustive competitive landscape study and found that while manyof the existing products have strong teams, few of the existing products solve theproblems expressed to us by real advertisers: trusting the auction system, integrationand user experience related challenges, removed barriers to entry and ad policy/brandequity related challenges.

There are a number of other products in this space, among them: Basic AttentionToken, AdChain, qChain, AdEx, AdShares and others.

Some of the other projects aim to revolutionize advertising in general, changingthe proven market concept. Brave Software’s product, Basic Attention Token, forexample, aims to change the model of advertising to one where value flows throughconsumers, rather than straight from advertiser to publisher. A laudable goal, butthe adoption challenges are very significant and we believe lower barrier innova-tions can solve many of the same issues. Our goal has been to minimize adoptionchallenges while making a significant revolution towards mathematical guarantees,cost-effectiveness and decentralization.

5.2 Traditional Market

The dominant duo of online advertising – Facebook and Google – are the primarysignificant vendors accessible to small advertisers. While hundreds of other platformsexist, many are rampant with fraud, others have minimum buy-ins and require pub-lishers and advertisers alike to have established software development teams just tointerface with.

The two dominant products, having such a strong market advantage of usabilityand lower barriers to entry, have very steep fees. As an example, Google’s producton the publisher side, AdSense, is known to charge a fee of more than 30% for theirpublishers [3]. Being an open, decentralized product, our fee to utilize the networkwill be zero8, the staking model will be affordable and the transaction costs fromusing the computing resources minimal.

The rest of the ecosystem is dominated by “programmatic” real-time-bidding(RTB) platforms, that have base costs that start at more than $10,000 a month

8To generate revenue, we will have fees, denoted in ATTN, to utilize some of our optional userexperience tools, but the competitive landscape of providing fully open, decentralized tooling, willforce our fees to be competitive with anyone else who wishes to participate in the infrastructuremarket.

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per advertiser, and require software teams to participate in processes like headerbidding, sorting and selecting ads, and actual ad placement. As we need to achievea simultaneous network of publishers and advertisers, we have designed two systemsto stimulate adoption: 1. the integration of a select set of existing RTB systems in toour platform, removing both the need for custom software development and the highcost of entry, and immediately producing a volume of more than 1,000,000,000 (onebillion) impressions per day and 2. we have secured commitments from a collectionof very high volume publishers and advertisers9.

6 Operations and Roadmap

6.1 Platform Roadmap

With years of combined investment in ad tech., and extensive research includingfeasibility studies, conference attendance, networking, alpha and experimental soft-ware development and meaningful partnership establishment already behind us, wepresent here a roadmap for the next steps to build and grow the Attention Network.

We have developed a detailed plan, and present here a high-level summary, forhow to establish Attention Network as a leader in the space. What follows is ahigh level summary. The ecosystem is evolving rapidly; the right way to implementthe Attention Network product is be expected to evolve along with it. As such,this section is intended to give the reader insight with respect to our current plan,but this plan is a living document that we will iterate on. We intend to producedetailed biweekly updates to keep everyone apprised of our progress, posted publiclyon Medium or a similar platform.

9We are not prepared to publicize specific partnerships yet, but they include one of the largestRON publishers in North America, 4 high-volume networks and advertisers ranging from Fortune500 companies, tech. “unicorns” and dozens of direct-to-consumer brands.

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2018 2019 2020

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Release Alpha —

Token Sale

Sale

Business Plan Adjustment

Revised Plan Released —

Platform Construction

Core Platform

Testing

Audit and UX Review

Launch —

Ongoing Development

Feedback and Iteration

DMP Integrations

Further Development Activity

Intensive Marketing

Incentive Recruitment

On-boarding Existing Partners

Partnership Formation

Further Sales Activity

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6.2 Software Audit

As cryptocurrency smart contracts are immutable and high value assets are at risk,it is essential to have proper security review of every part of a decentralized appli-cations’ stack. As such, we have formed relationships with a number of softwareauditing firms, and selected a few tentative auditors, to review our smart contractimplementation, do code quality, penetration and security audits on the entire stackand perform at least 3 rounds of user experience testing during the initial rounddevelopment. Our goal, in working with external auditors, is to further improvethe quality of the product by harnessing insight from specialized experts around theworld in a cost effective way.

6.3 Business Development

Our plan for achieving scale of adoption with the product is to invest heavily inmarketing and business development. We have begun the process of forming rela-tionships with large-scale advertisers and publishers, securing commitments from toptier advertisers and publishers. After months of approaching advertisers with propos-als to bring them on board, we have perfected a process to onboard new advertisers.Our goal, will be to scale that process and increase our integration with existingbackbone infrastructure products, such as the real-time bidding networks, to makeour implied supply of advertisers and publishers the largest in the world immediatelyafter launch. We will continue the integration of other platforms’ inventory in to oursystem immediately after launch. Alongside the integration of new platform pieces,we will be scaling up the process to bring new advertisers aboard, hiring a smallteam to do professional sales.

In summary, our business development plan is to scale up securing commitmentsfrom top tier advertisers and publishers, continue the integration of existing marketsof supply and demand for advertisement space in to our unified, user-friendly andcost effective network and aggressively engage in advertising and networking of ourown system.

6.4 Future Plans

After the initial product is completed, the highest focus will pivot to marketing, toensure we get the product in the hands of high impact users. During this period,the development team will continue on integrations with existing platforms, feedbackand iteration and then further feature development. While, we expect the priorities

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to change somewhat as the surrounding ecosystem evolves, we share a sample offuture plans here.

6.4.1 Pay for Lead Quality

A serious problem in the online advertising industry is the disconnect between pay-for-impression and the actual goal of advertisers: maximizing time-discounted brand-associated revenue per dollar spent. An obvious step in that direction is paying forclicks, paying for actions (e.g., sales and leads) and other structures that move thead cost closer to the business goal. Unfortunately, these strategies are fraught withfraudulent behavior – even in the simplest step in that direction, click fraud, isestimated to make up nearly 10% of total ad spend [4]. In pay-for-action models,fraud is more complicated, but the rewards are so much higher and brand equitycan be compromised so catastrophically, that it makes up an even more seriousproblem. In aggregate, fraud alone is estimated to cost advertisers more than $16billion annually [6] and has been described as an organized crime “second only tothe drugs trade” [8].

Worse than fraud, in all existing models, advertisers are forced to estimate theeffectiveness of their advertisements with asymmetric information: leading to baddecisions and extensive waste. The transparency and cryptographic guarantees ofour model allow a payment mechanism that resolves this issue. A legitimacy modelcan be presented by an advertiser, and the very same staking system that supports adpolicy can be used to produce compliance. This model, combined with the Vickrey–Clarke–Groves auction system, can ensure complete transparency between advertiserand publisher for sales events and lead quality, while aligning incentives to maintainlong-term brand equity. We have developed and tested proof-of-concept legitimacymodels, in partnership with pay-for-performance product companies to prove theviability of this approach.

Furthermore, for advertisers who accept payment with cryptocurrency, we willprovide a profit-sharing contract that will allow perfect guarantee of conversion eventswith no sophisticated legitimacy model necessary. While not required, as we are eagerto support all prospective advertisers to maximize our reach, such advertisers willbe at an advantage in our ecosystem, as publishers will not require significant stake,because the payment structure provides a proof of honesty.

In summary, a very minimal extension to our model can radically transform theasymmetric information problem in advertising. This is an incredible implication – itis widely estimated that more than 50% of advertising spend worldwide is wasted onfraud, ineffective advertisements due to bad measurement and asymmetric informa-

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tion problems, all of which is resolvable by relying on the innovations of mathematicalmodeling, cryptography and blockchain technology.

6.4.2 Surrounding Ecosystem

We plan to move with the industry, adding new ad units like native advertising, paidsponsorships, influencer networks, performance (conversion) focused marketing andother innovations to ensure that the exchange deeply serves the needs of our market.

For the space of other advertising innovations, we provide a modular toolkit andAPI layer built upon our network. It will be possible for other teams to build atopthe Attention Network’s core, open source infrastructure, utilizing our token, stakingmodel and network innovations to the benefit of other decentralized products. This,of course, is the nature of decentralized applications and one of the core benefits ofbuilding upon the blockchain.

By cultivating such an ecosystem, we ensure the product supports the needs ofmany users and the value of the network increases similarly to Metcalfe’s law: ina trustworthy and transparent network, more available services and more networkparticipants increases the value for all users.

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7 Team

7.1 Giuseppe A. Burtini, Chief Executive Officer

With more than 15 years software and ad tech. industry experience, an experiencedexecutive, trusted business advisor and long-term entrepreneur, Giuseppe bringsbusiness and technical management expertise to the team. Giuseppe has been aninvited speaker at a number of conferences, an active, published scholar in the field ofadvertising technology, and provides technical advisory services to numerous adver-tising and technology startups. Most recently, before Attention Network, Giuseppeled the technology team as CTO and Director of Technology at one of the mostinnovative ad tech. companies in North America.

7.2 Jake G. Davies, Chief Technology Officer

Jake has spent the last 5 years of his software development career in the ad tech.industry. A seasoned team lead turned technology executive, Attention Network wasborn from his blended interest in cryptocurrencies, decentralization and advertising.Jake has particular expertise in high-performance, high-throughput, error-sensitivesoftware development and will pull from his proven successes to lead the engineeringteam at Attention Network.

7.3 Eric Huang

Cryptocurrency expert, talented software developer and founder of BlockCAT Tech-nologies, Eric joins Attention Network team as an advisor and consultant in the spaceof smart contracts and Solidity programming. His expertise in security, audit andarchitecture of smart contracts continues to prove invaluable to our team as we utilizethe more complex concepts of staking, community governance and computationallyeffective blockchain use.

7.4 Niket Shah

Niket brings his huge network of large scale marketing teams worldwide to AttentionNetwork. His long tenure working at two behemoths of online advertising – Facebookand OpenText – has given him a thorough understanding of marketing and an edgein the strategic business landscape. During his career, Niket has brought meaningfulimpact to the businesses he is involved in, from building a business unit of over$400M in annual sales in less than 2 years, to traveling the world as an invited

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speaker, his industry expertise and deep connections will help us consistently closethe right deals, with the right partners and ensure Attention Network is in the handsof powerhouses in online advertising.

7.5 B. Johannes Edinger

An award winning economist trained at Queen’s University, a former statistical an-alyst and founder of a successful analytics company, Johannes brings a world classpractice of applied econometric modeling and statistical analysis to the team.

7.6 Dr. Scott Fazackerley

Scott Fazackerley (Ph. D) is a software developer, real-time processing expert andaccomplished software architecture professional, currently teaching a range of soft-ware engineering courses at an applied technical school in Western Canada. Scottwill join the team as a consultant and advisor, both in the areas of technical hiringand in infrastructure, innovation and engineering process.

7.7 Yuchen Li

Yuchen is our connection to China, the world’s second biggest online advertising mar-ket. With a background in economics, a Master of Science degree from the Universityof Waterloo and considerable experience in the immigration and capital movementindustries, Yuchen provides considerable analytical and technical expertise, whilealso bringing political and cultural awareness to the team.

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8 Legal Considerations

This section provides readers clarity about the legal implications of the productand token, with respect to warrants and purpose. ATTN tokens are a tool usedto produce the functionality of Attention Network, currently available at https:

//demo.attentionnetwork.io/, specifically, the tokens allow advertisers to provide“stake” within the Ethereum network to purchase advertisements and allow adver-tisers and publishers alike to provide assurance within the staking model describedin section 3.2. Fundamentally, ATTN tokens are the mechanism by which the sys-tem can be used to solve the technical and performance challenges of building an adserver while remaining decentralized. ATTN is not for speculative investment.No rights are associated with the token. Proceeds of the token sale may be spentas the company sees appropriate and plans are expected to change as managementadapts to a changing world.

As with all technology, but specifically due to the decentralization of our platform,we cannot protect users against any errors or omissions, ours or otherwise. Our teamis investing heavily in safety, security and stability of the tooling and associatednetwork, however, no warrant of merchantability or fitness for a particularpurpose is provided and all risk associated with the platform and token is solelyassumed by the user. Additionally, users should know, Attention Network, as well asits staff and any associated legal entities, are obligated to act within the laws of itsoperational countries, particularly, but not exhaustively or exclusively, with respectto privacy, defamation and decency laws. Legal considerations may influence thedecisions made by the company.

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References

[1] V. Buterin, Analyzing token sale models, June 2017.

[2] D. Garg, Y. Narahari, and S. Gujar, Foundations of mechanism design: Atutorial part 1-key concepts and classical results, Sadhana, 33 (2008), pp. 83–130.

[3] Google, Adsense revenue share, 2018.

[4] B. J. Jansen, Click fraud, Computer, 40 (2007), pp. 85–86.

[5] Protocol Labs, Protocol labs: Creating new networks, May 2017.

[6] The&Partnership, What happens next: How to reverse the rising tide of adfraud, 2017.

[7] Wikipedia, Vickrey–clarke–groves auction, January 2018.

[8] World Federation of Advertisers, Compendium of ad fraud knowledgefor media investors, 2016.

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